31% Express Catering rebounding profit

Tourist arrivals passing through Montego Bay rebounded strongly in the August quarter just a fraction less than the previous high mark in 2019 pushing revenues at Express Catering up 35 percent for the first quarter of the 2023 fiscal year to August to US$4.9 million as profit surged 31 percent to US$652,841, even as the 2021 period benefited from a rental concession of US$351,544, with none in the latest quarter.

Ian Dear, Managing Director of Express Catering

The company also released full year results showing continued recovery from last fiscal year’s fallout, with a profit of US$1.1 million, up from a loss of USUS$1.73 million in 2021. In contrast, in the nine months to February, profit was just US$364,607, with only US$120,248 of it generated in the February quarter.
Sales jumped 223 percent for the year to US$14.24 million from just US$4.4 million in 2021. For the fourth quarter, revenues rose to US$4.6 million, just 7 percent behind the August 2022 quarter and well ahead of the US$933,000 generated in 2021.
According to directors Ian Dear and John Byles, “total passengers accessing the departure lounge at the Sangster International Airport during the quarter were just below 623,000 or 37.44 percent higher than the similar period last year.” The directors also stated that they expect the trend to continue for the rest of the fiscal year.
Gross profit margin remained stable at around 65 percent for all periods from 2021, but input rose a tad faster than sales, with that for the latest quarter rising 40 percent and 228 percent for the fiscal year. The effect, gross profit rose just 32 percent in the August quarter to US$3.17 million from US$2.4 million in 2021 and increased 220 percent for the 2022 fiscal year, to US$9.3 million from US$2.9 million in 2021.
Administrative expenses rose 24 percent to US$1.23 million in the August 2022 quarter and increased 100 percent in the year to May, to US$5 million. Depreciation charge moved from US$2.4 million to US$2.78 million for the fiscal year and was stable at US$678,000 in the latest quarter. Finance costs rose in the quarter, to US$522,000 from US$515,000 in 2021 and from US$1.9 million to US$2.1 million for the year to May.
Gross cash flow brought in US$1.35 million, with US$1 million advanced to a related company, in addition to fixed assets consuming $298,324 and lease payment absorbed US$475,222.
At the end of August, shareholders’ equity stood at US$3.9 million with borrowings at US$33 million. Current assets ended the period at US$12.6 million, with US$11 million due from related company, without a date for repayment and on which no interest is charged even as the company is due to pay interest at around 12 percent per annum on funds it owes. Current liabilities amount to $6.47 million and Net current assets ended the period at US$6.1 million.
Earnings per share came in at 0.04 US cents for the quarter and 0.067 US cents for the fiscal year, If the company passed on the interest cost to the related party, profit for the quarter would be higher by around U$350,000 for the quarter, assuming no amount changed back for the prior years and more than US$1 3 million for the year.
ICInsider.com forecasts 40 Jamaican cents per share earnings for 2023 fiscal, assuming no interest is charged on the intercompany debt. The rebound in tourist arrivals only came back to 2019 levels in June, this year. Providing there are no reversals, the company that is highly dependent on the sector will enjoy a big bounce for the next nine months compared to the lower business generated from last year to May this year.
The PE is 13 times earnings based on the latest stock price of $5.25 on the Junior Market of the Jamaica Stock Exchange.
The company is increasing its coverage in the airport, according to the Directors, construction work on the revamped post security food and beverage lounge is ongoing. “There was a soft transitioning into the new food court with some concepts opening March 2022” stated the report accompanying the quarterly. Work on the second phase is slated for completion by the end of December, the directors indicated, “with the full rollout of the rest of Concepts – Bob Marley One Love, Freshens and Bento Sushi.”

NCB the stock to watch

NCB tis the stock to watch with big jump in profit from continuingh operations.

Investors in aggressive buying of NCB Financial shares in late 2018, pushed the group’s shares up to a record high of $161 on last day of November last, following full year’s results that were released earlier in the month.
If investors reacted so strongly to results that were telegraphed previously by the nine months results, it will be interesting to see how they react to the 29 percent hike in dividend and a 40 percent rise in profit before one-time income and taxation.
With profits from ongoing operations seeming set to rise to the $14 region this year, NCB Financial is clearly the stock to watch today.
The results could spark the start of the 2019 rally in the main market and push the price well beyond resistance around the $160 market and unto the next resistance around $200.
In pre market activity, the indication is that the stock will move higher than the $145 it last traded at on Thursday. With just over ten minutes to the start of trading, there are 20,300 units on the bid at $147 and ten at $145 to $145.01.

Producers’ improving performance

Jamaica Producers HQ in Kingston Jamaica

Jamaica Producers HQ in Kingston Jamaica

Revenues climbed an impressive 30 percent, for Jamaica Producers Group for the June quarter this year over 2013, to $2.39 billion. Net profit attributable to shareholders was $104 million, a 42 percent increase relative to the same period last year.
For the half year to June, net profit attributable to shareholders was $138 million, a 13 percent decline, compared with the similar period in 2013. This year’s performance only had $17 million of gain on sales of fixed assets and investments compared with $105 million in 2013. The 2013 result was negatively affected by $36 million in restructuring cost, there was no such charge this year, resulting in the quality of earnings from ongoing operations being better than in 2013.
Europe| In the 2014 second quarter, the Europe division earned revenues of $1.78 billion and pre-tax profits of $167 million, a 33 percent increase in revenues and 196 percent increase in pre-tax profits relative to the 2013 second quarter. Europe is still facing tough economic conditions, resulting in further monetary easing recently, leading to the Euro slipping sharply in value. This development could negatively affect Producers profit for the rest of the year. The results for 2015 could benefit from the monetary easing as the economy could benefit from the stimuli. The local currency could stay stable for some time thus robbing it of the gains make due to currency slippage in the first half of the year.
JP Tropical Division includes businesses located in the Caribbean that faced particularly challenging production and trading environment that adversely affected margins. The division experienced a loss during the 2014 second quarter of $43 million compared to a profit of $27 million for the same period in the prior year, although revenue grew 25 percent. The loss to JP shareholders is $20 million.
jamaica_producers+Tropicallogo150x150JP Tropical Foods experienced growth in its snack foods product lines, particularly in the USA and UK markets. During the quarter, we launched a new tropical snack brand of plantain and cassava chips for the Dominican Republic market.
Gross profit climbed slower than operating revenues at 24.7 percent in the June quarter to $549 billion but was in line with revenues in the year to date period with gross profit rising 17.8 percent to $977 million.
Subsequent to the quarter the group acquired 11.59 percent more Kingston Wharves shares raising its stake to approximately 42 percent to become an even more dominant shareholder of the company. The rate of return on this latest investment is likely to be around 8 percent, or just slightly better than government of Jamaica current Treasury bill rate. But Producers’ focus would be on the longer term growth prospects that will accrue from the expansion of the port, and the increased business that they expect, especially with the opening of an expanded Panama Canal.
The main activities of the group are juice and food manufacturing, the cultivation, marketing and distribution of fresh produce locally, logistics, land management and the holding of investments.
Finances|At the end of June, the group had debt close to $1.2 billion, that should rise with the acquisition of the Kingston Wharves share purchase, as it was partially funded by borrowed money. Equity stood at $5.9 billion and they had cash funds and investments of $987 million. Current assets to current liability was below norm, at $2 billion to $1.5 billion.
Encouraging results| The results for 2014 so far is encouraging, importantly, Jamaica Producers is adding new products to the existing lines, both in the Caribbean and Europe, this is one of the surest ways of improving profitability as it is less costly to add new lines as much of the overheads cost are already built into the system. This is clearly a stock to be watched.